Good afternoon, ladies and gentlemen, and welcome to Swisscom's full year results presentation here in Zurich. My name is Louis Schmidt, Head of Investor Relations. After the short introductory movie with impressions on our activities and our core belief and behavior of being ready, we now start the presentation with the program and a quick introduction of today's speakers on Slide number 2. Urs Sheppi, our CEO, starts with Chapter 1, achievements 'nineteen, where he dives into last year highlights commercially, operationally and financially. Then Urs gives a short strategic update and elaborates on our priorities for this year to keep our high competitiveness and sustain value.
In Chapter 2, our CEO gives you a short overview on our 19 achievements within Swisscom Switzerland before updating our network rollout ambitions and explaining our roadmap of activities along our strategic framework for B2C and B2B. Alberto Calcagno, CEO of Fastweb, will discuss in Chapter 3 the industrial and financial performances of our Italian business and its plans going forward. After Alberto's presentation, we will have a short coffee break and continue at 3 p. M. With the chapters presented by our CFO.
Mario Rossi will discuss first in Chapter 4, the operational excellent results and plans. Then in Chapter 5, he will present in detail our financials 'nineteen, including the outlook 'twenty. And then lastly, in Chapter 6, after the presentation, some final remarks from our CEO, Urs Sheppey. Thereafter, we move into the Q and A session for this chapter Dirk Gweert Spitske, Head of B2C and Urs Lehner, Head of B2B, will support in case of specific questions. May I kindly ask you to keep all your questions until the 14 slot at the very end of the presentation.
With that, I would like to open the conference and hand over to our CEO for his part. Urs, the floor is yours.
So thank you, Louis, for the introduction and a warm welcome from my side. And I would like to go first on a very high level on our main achievements in 20 19. So overall, I would say we were delivering what we announced. And on the infrastructure side, we pointed out that we are at a clear number 1. So if you look to the mobile test as an example, so we won every important test.
We had the all time high on the score in the Connect test. I think we delivered on the network quality. In mobile, you see also that we were able to improve our footprint on ultra broadband. And I think an important step in 2019 was also the regulation or to avoid the regulation on fiber, on fiber to the home. So overall, on the infrastructure side, a good development.
For Fastweb, we were able to grow in all segments. Alberto will give you later some more flower on it. Important is also our initiative on this converged product where we made a big progress and where we have a good momentum on mobile. If you look to our B2C business, we had a major, let's say, new tariff plan, which we introduced. It's our in1 mobile GOAT or the inone mobile, the 2nd generation mobile where we included the roaming in our product.
And this is the most successful product we ever launched if you compare it on the level of subscribers. So in only 10 months, we were able to get €1,000,000 on this tariff plan. An important innovation in the B2B market was certainly also our launch the launch of the new TV platform. We call it today not TV platform. We call it Swisscom box because it's much more than just TV.
It's an entertainment platform. It's a smart entertainment platform, which has more and more functionality of smart home in it. We see it later a bit more on this topic. And then with 2nd and third brand, we are on the way. So in the more price sensitive market, we are able to gain some market share with 2nd and third brand.
But just to mention it here, the main topic is or the main priority is to push our main brand Swisscom and not second and third brands. Then on the operational side, we were certainly we had success on our cost initiatives. We were able to decrease our indirect costs by SEK127,000,000, the indirect costs only. And with all IP, so we are through. So we made the migration of all IP in the retail market.
99% of our customer are now really migrated to IP, and we are in the phase of decommissioning now the old infrastructure. B2B is certainly one of our challenges. We have in the B2B segment a lot of price pressure, mainly in the Connectivity business. On the other side, we are very well positioned in the B2B market. We have a really differentiated product portfolio.
And we have a very good order intake in our B2B business. We are able to grow on cloud. We are able to grow in the security space. And so I think there is potential in the IT Solution business to create some growth. And then we had more an organizational topic.
We actually merged the SME department with the corporate department, so we can get more synergy out of it on the product side, but also in the go to market side. So overall, at the end, we delivered our guidance. So we fully met our guidance. We have an underlying flat EBITDA. I think that's a good result the market where we are to have a flat underlying EBITDA.
And so we will also pay out the dividend of CHF 22 after the general assembly. So overall, I would say a solid good year in a tough market. Here's some information to our net adds. So you see in Switzerland that we are in a saturated market. And we have small, small growth or let's say small growth or stable market shares in broadband.
We have slightly increasing market share in TV. We are still able to grow through our superior TV platform. We have now a market share of 36%. On fixed voice, you see a bit less dynamic in the cancellation of the voice lines because also the all IP migration is done. So there is a bit less cancellation on fixed voice.
And on mobile, you see that we are able to have some growth on postpaid and overall approximately stable market share. So I think that's a good result. I will come later also to the churn figures, but the market is saturated. In Italy, there is a bit another picture. We are able to have a better growth dynamic on mobile, but also in our broadband business.
And this is important because if we combine these two products, we can have a much better ARPU and lower churn in Italy. Coming to the key financials. So you see that our revenue is at SEK11.45 billion, slightly decrease. There are different elements in it. The majority of this decline is coming out of the service revenue decline in Switzerland.
And then a higher net income, Mario will explain it later. These are more booking topics from a new tax reform in Switzerland. But the main message is more on the left side or on the right side of this chart. If you look to the, call it, area in the middle of this chart, you see that we have an underlying EBITDA, which is stable or plus 4 €1,000,000 with a different dynamic. In Switzerland, the reduction of €23,000,000 That means the majority of the service revenue decline was compensated through cost reductions.
So we were able to compensate the majority of the impact on top line through efficiency measurements. And Fastweb is growing with 41 €1,000,000 EBITDA. So overall, stable. And the reported EBITDA is SEK4.38 billion. On the bottom of the chart, you see our free cash flow profile.
So in the CapEx, in this CHF 2,400,000,000 CapEx, there is also the spectrum of 5 gs included, Approximately €200,000,000 payouts for the spectrum is included in this €2.4 1,000,000,000 CapEx. So we have a solid operating free cash flow of CHF 1.6 billion. And this shows also that we have a dividend coverage, which is in the region of 85%. Maybe the last comment on this chart is our leverage ratio. So it's a stable we have a stable leverage ratio, 2.0.
And if you take out all the IFRS effects, it would be 1.7. What is our strategy? So the strategy is unchanged. It's proven. And we were successful in defending our number one market position across all the segments.
And the what's really the basic of our strategy? Three pillars. The first one is to deliver a superior customer experience. One of the example for this is our Swisscom TV product. I would say really that's one of the best TV platform certainly in Switzerland, but I would say even across Switzerland in the world.
And our strategy is to be an aggregator in this content world, which is becoming more and more complex. So we have an aggregator approach to deliver our customer the easiest way to the content which he likes and that he also can use it in a more simple way, so through voice interface as an example. So customer experience is the important pillar. That's product on the one side, but on the other side, it's also our network. It's extremely important to have a performing network and this out of the perspective of the customers.
So that means if we build up networks, we don't just go for drop calls or speed, but we are optimizing our networks as an example that you have low latency on your content. So that at the end, it's the end to end customer experience which counts. And there, we have the ambition to be clearly better than our competitors. 2nd pillar of our strategy is operational excellence. Mario will come later to it.
To deliver the savings, We delivered in the last year savings above on the indirect cost level above SEK 100,000,000. We have also the ambition to deliver savings in the next year in the region of SEK 100,000,000. Mario will show you a bit more on this later. And then the 3rd pillar of our strategy is to have to invest in a very focused and selective way in new areas around our core business to create some new growth. But at the end for us, it's clear the prosperity of Swisscom is coming out of the core business.
And then that's why it is so important that we perform on the customer experience level. This is these are the main elements of our differentiation strategy. So we want not to be the lowest in price. We want to be the one who has a superior product portfolio or superior offering. And you see on what we are working, the base of it is what I explained before, to have a performing network.
But on the network side, even it's more important to have a good coverage than just only a lot of speed. I think coverage is extremely important. Certainly on mobile, that's a no brainer. But also in the positioning of Swisscom also on the broadband space to have a broad coverage. And then on it, a high performing infrastructure.
Product, I explained. Customer service, I also explained. And then it's a question for what our brand is standing. What's the brand? What's the root of our brand?
And our brand is a premium brand, quality oriented brand. Our brand has a superior premium experience. So that means also customer focus. Customer focus is an important topic and innovation. If and that all should be in a received in the market as a premium brand.
And I would say we made our business in a good way. If the customer in Switzerland, if our stakeholder in Switzerland tell us Swisscom is a sympathetic customer oriented successful company. If we are able to create this, I would say, then we are in a solid situation. Then the political people likes us, then the customer likes us. And all the stakeholders have a good stickiness to our company.
Key success factor in 2020. So the first and the most important pillar is we have to do all that we can strengthen our core business. That means I repeat it, that means network quality. That means also using the potential of converged offerings on a value based approach, not on a discount approach. And then to do our transformation in the B2B business, that means also putting together the SME and the corporate department and standardizing the products in the B2B area so that we gain more scale.
And then realizing some growth areas where we can grow in the smart ICT part, IoT part also, but this is not the biggest plant at the end, but it's an important plant. And cloud, cloud is certainly important. Security is important. But changing our core business is the main pillar our main priority. 2nd priority, very important priority is to bring faster to the next level of growth.
There we have the potential, Alberto will explain it later, to use the potential of the partnership with Win J where we can enter in the 5 gs market. With 5 gs, we will be able to be an innovative leader and to use the convergence. And the advantage of this is clear. At the end, churn levels are better in a converged offer, substantially better and also that the ARPU is better. So that means we can create more value out of a converged offer in Italy.
That's why we push also these converged offers. And then generating some new businesses in the wholesale market, but also in the B2B market. In the B2B market, Fasrep has a very strong position, and we are increasing our market share in the B2B market. And then the 3rd priority is certainly working on our cost measurements, not only for 2020, but also for 2021 2022. So we have to fill the pipeline with initiatives that our costs are going down in 2021 2022 by this €100,000,000 Some words on Switzerland, Swisscom Switzerland.
If you look to our commercial performance in the B2C market, I would say we were really successful with launching our new mobile generation. I explained it before, a very good take up. Net Promoter Score is better with the new product than before. And through also the debundling, it's a debundled product, we were able to save also direct costs. Market share defend, we were able to defend our market share in a market where which is very promotion oriented, where we have a kind of washing machine and in the lower end of the market, Jeff, I would say we have a kind of washing machine through promotion, we were able to defend our market share and have low churn figures.
Our churn figures in converged offer is 6%. Churn figures in mobile is 8% and the churn figures on broadband is 9%. So that shows that we have a stable customer base. And we were able to differentiate ourselves additionally through the new TV platform. So overall, a good market performance in B2C.
In B2B, we have promising development on security cloud, IoT. We have acquired a small company, United Security Providers, which sends our portfolio in the cyberspace. Cyberspace is a big challenge, certainly also for the SME market where we have a very strong position. And so we are able to differentiate our product portfolio in the SME markets through cybersecurity solutions. And then there were a lot of different products, which changed actually our positioning in the B2B market.
Here on this chart, some figures. I don't want to go through each of them, but some of the figures in 2019, which shows that we had a good momentum, we have a market share in TV of 36%. We have fixed mobile penetration in the broadband customer base of 44% and then this churn figures, as I mentioned it before and the blended ARPU, which is stable in mobile and in fixed. In the B2B market, we have this challenge, as I mentioned it before. So we have this price pressure on mobile.
You see that we have an ARPU of CHF 26 and this ARPU went down by 13%. That's the result actually of aggressive price moves of our competitors. But on the market share side, we are approximately stable on the market shares. In wireline, we are still a bit suffering through the all IP migration of the consolidation. If you do an all IP project, that's always a chance to actually clean up your voice lines.
And that's the effect what we see here in the results in the fixed business. Solution business has a de working dynamic, so up growth on security and cloud and stable or slightly down in workplace also because of some dynamics I explained it before. But and that's the good message, €3,100,000,000 order intake in 2019. Network side, I think impressive is the increasement of our ultra broadband coverage. So we were able to increase the ultra broadband coverage where we have speeds above 80 megabits per second to 74%.
74% of Switzerland has speed above 80 megabit up to 10 giga. And this is you see that there is actually a big change to the last year. And actually, each day, we are building out 1 village or 1 community with a new ultra broadband offer. But also on mobile, we were able to increase the footprint on 4 gs plus 4 gs plus is actually a more speedy 4 gs solution. We are able to do with 4 gs up to 500 megabits per second.
And on this technology, we have a footprint of 72%. And last year, we were 32% low. So we see that there is a big dynamic in rolling out also our 4 gs network. So 5 gs, we get spectrum. We have a good spectrum amount, a good market share on spectrum.
We get the spectrum for a good price. I would say approximately €200,000,000 if you compare this with other countries, I think we get it for a good price. And we are doing our rollout on 5 gs. We are ahead on 5 gs. Today, we have a coverage on 5 gs in Switzerland of 90%.
This is on dynamic spectrum sharing, dynamic spectrum sharing footprint, but 90% of Switzerland is covered with 5 gs. And now in the next month, there will be handsets on the market, which has the capabilities to use dynamic spectrum sharing. And then you can use in 90% of Switzerland the first version of 5 gs. That's not the end. 5 gs has different evolution passes, but the first step is actually has already a good coverage.
We have challenges in Switzerland to roll out the 5 gs networks. There is a bit sometimes also a kind of blockage to build new sites, but that's for everybody, yes, for every competitor the same. So I hope that we get more rationality in this topic today. It's very emotional discussed in Switzerland. And I think well, I don't think I ask for it or I demand for it that the parliament is now really challenged to give some guidance because they sold us the spectrum.
They gave us the goal to make a fast rollout of 5 gs. Now they have to help us that we can construct the network. But not everybody sees it in the same way in Switzerland. But I think in 2 years, we will have another discussion because everybody will using 5 gs. And so all the emotional topics are forgot.
On the financials, so you see the revenue. On the left side, I think important to mention is that's in Switzerland, is to mention the service revenue decline. You see that we lost €290,000,000 through price reduction or price erosion in Switzerland. That's a lot. That's a lot.
Mario will explain it later. I think we will be able to get in a better position. But in 2019, we lost SEK 290,000,000. And on the bottom of the chart, you see that it was €178,000,000 in the retail business and €110,000,000 in the enterprise business. On the right side of the chart, you see our EBITDA.
And the graph on the bottom of the line shows the dynamic of this EBITDA after this IFRS adjustments, lease expenses. So you see that we lost €41,000,000 through fixed voice line reduction. That's a part of it is also all IP driven. The other part is just substitution, fixed to mobile substitution. We lost some revenue of €59,000,000 through fixed converged offers.
On the other side, we have the benefit of a much better customer lifetime value. And then we have some Artyomix erosion of this €58,000,000 in the mobile space. And then B2B, this €112,000,000 which I already mentioned. And on the other side, some positive momentum on wholesale. This is 52.
That's broadband. On the one side, broadband, it's a part of it. This is MVNO. But there is also some inbound roaming revenues or other wholesale revenues in it. But positive momentum mainly here showed on wholesale and then the indirect costs.
And this leads us at the end to this €90,000,000 reduction of EBITDAAL. If you come to our network strategy. So our ambition for 2025 is actually to doubling the footprint of Vipe to the Home to 50% to 60%. So that's the one topic. The second topic is that we have the ambition to have 99% of Switzerland covered with 4 gs, 5 gs in a combination.
And then we have also a converged approach. So we will not have 1 and the other network which are isolated. So we really take the advantage of these two networks. That means in some areas, we will do bonding. That means combination of fixed and mobile network.
And in some areas, in some selective areas, we will do fixed wireless access. But our view on fixed wireless access, that's more it's more a technology for very specific areas, more rural areas where you have where it would be very expensive to roll out a fiber network. The majority of the business will be done through fiber, and we believe in the positioning of the fiber networks. So you see our ambition on fiber to the home, so doubling the footprint to 50% to 60%. And second message on wireline is to also ramp up our fiber to the street networks so that we are able to have speeds 300 to 500 megabits per second and this in a footprint of 30% to 40 percent.
So you see that in 2025, we will have really a very strong fast network in Switzerland. Important is, certainly, what does this cost? What is happening with our CapEx? Are the CapEx going up or we believe that we can execute this network strategy from before with CapEx in Switzerland in the region of SEK1.6 billion. So that means approximately stable CapEx.
In Switzerland and in the chart in the pie chart on the right side, you see actually what is changing. In the inner circle of this chart, you see the mix of CapEx from 2015 to 2017. Around, you see the mix of 2018 further on. So you see that we will invest 55% in our networks, wireline, fiber investments and wireless. We will have less investments, less CapEx on IT and project and maintenance is approximately stable.
So a change in the CapEx mix shift in the CapEx mix, but overall stable CapEx at SEK1.6 billion. And here you see the result of this strategy out of the perspective of the coverage. On the right side, you see where we are today, what kind of speed profile we have in Switzerland. So as an example, 74% has a speed above 200 megabit today. And in 25, you see that we have this fiber to the home or 10 gigabit of 50% to 60% and then this fiber to the street, 300 to 400 megabit in 30% to 40%.
So at the end, there is only a very small part in Switzerland who has speeds in the region of 80 mega, So we're a very performing network. Some words to our mobile network. So we are proud that we were able to win all the different network tests. We had a score on the Connect test of 974%. That's the best ever achieved score in a Connect test.
And I think we don't have to say that we don't have a good network. Overall, we have an excellent network, and our ambition is clearly to perform also in the future on this topic. On the right side, you see the spectrum auction of 5 gs. I think here important is to say that we have 45% of the spectrum, which was available for 5 gs, was won by Swisscom for €496,000,000 So with 45% of the spectrum, we will be able to construct excellent networks. So we have enough spectrum to have best 5 gs networks.
Some words to our B2C business. Here is more an overview what I would like to touch in the next slides. You see about broadband entertainment, branding, 5 gs, some words on it. And I would like to start with broadband. On broadband, it's not just important to have a good network, as I explained it before.
It's also important to have strong products, a strong Internet box. And we launched in the Q4 of 2019 the new Internet box, an outstanding high performing box. If you look to the different tests, you see that this is really a very, very strong product. It's important. It's important also and an important part in our broadband strategy.
Also, WiFi in indoor coverage is normally a challenge in bigger houses. And there, we have also strong products for in house coverage. Interesting is to see that if we migrate the customer from a copper technology or a hybrid technology to a fiber technology that we have or a more speedy technology with G. Fast that the Net Promoter Score is going up by a factor of 1.6. Entertainment, somewhat to our TV business.
You see what are the building blocks of our TV business. We have the basic features, which are superior compared to our competitors. I don't want to read all these features which we have, but this is a broad portfolio of different features, basic features. Then we have our own content through TeleClub. We have exclusive sport rides, as an example, UEFA Champions League rights.
And then we have also the we have integrated 3rd party content because our strategy in the B2B business to be an aggregator. The world in the entertainment business for our customers is becoming more and more complex. It's today, it's not the problem to have content. The problem is to find the right content. And normally,
if you want if you
are looking for the content, you lose your whole time, then you don't have time to watch TV anymore. So it's important to get features, usability, which give you fast access to the right content what you like. So personalizing a TV box, a TV experience is an important part in our strategy. So that's also why we implemented new feature in this new TV box. So we have a voice assistant.
So you can call Hi Swisscom TV on and then you get your TV or James Bond and then you get James Bond. So and that's only the first phase. And this voice assistant is only the first phase. We will go much more to personalized home screens and also more to a smart home environment. I see that here we have a lot of potential to differentiate ourselves in the future.
And maybe if you have time, you can talk during the break with Dirk, our Head of the B2B business, and he is actually the father of TV. So he can give you some more flavor on it. Smart home. Why do we talk about smart home? Smart home is certainly not the biggest margin contributor for us.
But on the other side, it's an element to differentiate ourselves in the retail market. And that's why we also enabled our Internet box with smart home functionality. So we have a smart home app, Swisscom smart home app, and you see that we have a nice growth in this area. So 120 130% growth on connected devices. And we think that in 2024, half of the Swiss households will have smart home solutions.
So that shows the potential of this market. It's a hardware driven business. That's clear. But on the other side, it's an area where you can differentiate yourself. So that's why we are pushing also smart home products.
On our mobile proposition, I don't want to go deep in it, but that's a recapitulation of our hero product in mobile, where roaming is included in the whole EU. On maybe more on the performance side. This slide shows you that we have a penetration in one penetration of in mobile in the mobile space of the mobile revenue generating base in postpaid of 69%. So 67% of our customer has an in-one product. And on broadband, it's also the same actually the same figures.
68% of broadband revenue generating units are customers of the in one proposition. And you see on the right side that we have a good momentum on growing. That's clear once it's a bit flattening out, but we will have also in 2020 a growth momentum on our in-one product. Fixed mobile convergence is important. We are at the penetration level in the region of 40% in mobile and broadband.
And on the right side of the chart, you see the figures or you see why fixed mobile conversion offers are interesting. So you see that we have the red bar on the bottom of the right side. You see that we have a 6.3% churn rate, so substantially lower than single play offers. 2nd and third brand, I mentioned it before, that's more a round end of our product portfolio. We have 3 brands.
Wingo is our own brand. And then in combination with bigger retail with the biggest retail store in Switzerland, Migro and Coop. We have also 3rd brands. And the momentum on mobile is good. You see it on the right side.
We have 14% customer base share with 2nd and third brands. And it's also interesting to see that 2nd and third brands are mainly working in mobile. So the success of 2nd and third brand in Switzerland today is not really on broadband. It's more on mobile. That shows the chart on this side.
It's too complex normally for second and third channels to sell broadband offers. Customer interaction is an important topic. Customers want to have a multichannel approach. Maybe in some situation, they want to go mobile. In the other side, they want to go in a Swisscom shop.
So it's important to work on all these different channels and to integrate them in a good way that there is no channel gap between the different channels. And that's why we are working on it. It begins with apps, continues with the communication on bots, but also customer care and Swisscom shops. How much time do I have, Steve? About 10 minutes.
He told me I should talk a bit longer. Normally, I'm too short, so I try to explain a bit more. Yes, he always gave me some advice, Louis, but that's his job actually. But on 5 gs, we think that there is potential to have some opportunities beyond the core. That's clear.
The biggest part of 5 gs will be mobile broadband. That's where actually the most of the money will come out. That's why it is so important
to have
the right pricing on 5 gs. I think there our industries should be more intelligent on the pricing on 5 gs. But because our industry is not the most intelligent one, I'm not too optimistic that we will be able to have an additional that we can additionally charge for 5 gs. But it's certainly the ambition of Swisscom to charge a bit more for 5 gs. But we are not alone in this business.
But beside, there are other opportunities on 5 gs. In the B2B part, certainly on smart entertainment, I think we will see a lot of innovation there in the future, entertainment, virtual reality, 4 ks. I think we have to be close and have a watch on smart entertainment. Cloud gaming will be also an opportunity for 5 gs. And then consumer IoT, as I explained it before.
And I think also augmented reality. Augmented reality and virtual reality is a big topic. It's maybe hard to judge all the different applications which are coming, but this will be a big topic in the media market, but also in the B2B market. So we should have a watch on this 4 different subsegments to create some additional revenues.
On B2B,
just as an introductory remark, Swisscom Switzerland makes SEK2.2 billion in the B2B market. And if you look to the revenue distribution, you see approximately 50% is coming out of the solution business. This is the €1,000,000,000 €1,020,000,000 solution business. And then you see the connectivity business, wireless and wireline. So this €399,000,000,000 in wireless and €520,000,000 in wireline.
So approximately fifty-fifty, IT and telecommunication revenues, solution business are slightly going up. Telecommunications revenues will also continue to go down. We have to do all that the decline is not so fast as in 2019. And in the combination of these 2 different market segments, we are able to keep or to differentiate ourselves in the B2B market. I think it's important with the positioning of Swisscom, we have market shares in the B2B market.
It depends on the segment of 75% to more much more than 90% market shares. So for us, it's important to differentiate ourselves through a broad product portfolio. On wireline in the B2B market, you see on the right side of the chart the broad product portfolio, which we have. I think we are very well positioned, a full service portfolio on wireline, also around it with security solutions. And in this area, we will have also some structural changes.
The IP migration is actually already done. We are mainly completed. But now we are coming in a phase of virtualization. So the software defined networks, this software defined OTT solutions, That's a new dynamic which we have. This brings advantages for our customers.
And we have to do this migration in a clever way that we can took the revenues which we had in the wireless, let's say, in the MPLS networks, in the new product structures. So we are well prepared for doing this, but there will be a transformation, a structural transformation in the B2B market. On wireless, only one remark on this chart. You see that you see the dynamic on the left side on the mobile ARPUs. So we had a strong dynamic in 2017, 2018, 2019.
Now we are on an ARPU, I would say, which is comparable to Europe. Europe was approximately flat, so we had this negative dynamic in the last year in Switzerland. But you see that also there is some hope because the ARPU is already lower. On 5 gs, also on 5 gs, in B2B, there are opportunities. Certainly, also in mission critical communication, mobile private networks, there are a lot of opportunities.
Industry 4.0 are opportunities. We have the Olympic youth game in Switzerland, just as an example. And we made the whole timekeeping through a 5 gs private 5 gs network. And the advantage is phenomenal because you don't have to really put the wire on it. You can just do it over all over the year.
And it was working very well. And they actually saved the organization of the games. They say I would say they saved approximately 50% of the costs through doing it through 5 gs instead of on wireline technologies. And that shows that there is a lot of potential on 5 gs on a project base. ICT Business, only some very small remarks.
On the left side of the chart, you see which segment in the IT market in Switzerland are growing in a region of 5% to 10%. The whole market is growing with 4%, and some segments have a growth of 5% to 10%. And Swisscom is well positioned in a segment where we have growth of 5% to 10%. On the right side of the chart, you see our product portfolio. So it's a holistic product portfolio of horizontal and vertical solutions.
And here, the last chart, actually, that's the combination of the 2 departments, SME and Corporate. And you see what kind of advantages we will have out of this reorganization. So, Louis now I think comes through.
That's correct.
And I would like to hand over to Louis add to Louis to Alberto.
Louis, do you want to do it?
No, no. Next time.
So good afternoon, everybody. So for the first time in Italian, we talk less than Swiss. But Faso, we are used to execute in order to get to the results. So we will be on time. So very quickly, I'd like to spend also some minutes on strategy and how we think we will develop operations in the future.
And then we will do the usual classical set of information. Maybe we start with the market where we really think that there are 2 main streams that are emerging and that are very, very clear. The first one is that customers actually, in their perception, don't measure quality, quality anymore by comparing telco operator, but they have in mind, at least in the consumer space, an over the top type of experience. And clearly, bear in mind that it's true that this is mainly for consumer, but also big decision makers in big enterprises are, at the end, also consumer. So this is something that consumer space.
But in the future, we will see it also emerging in the enterprise. 2nd, what is important is the performance. Customers could care less about technology. So you can connect them through fiber to the home, fiber to the carb, 4 gs, 5 gs, Wi Fi, FWA, what is important is the performance. And so I think it's important, given these 2 big inputs that the market is delivering to operators or to service provider, it's important to share with you how we want to take it.
So basically, we have 2 layers. And the first one is the classical one, so the ultra broadband game. It's related with the infrastructure. As you can see, we don't talk anymore about mobile, about fixed, about fiber, about 5 gs. What is really important is to, let's say, concentrate on ultra broadband.
Technology is not relevant. What is relevant is the performance. And the second, the most important layer, where we do think that we will build a strong competitive advantage, EVS could be AVS, the 1 on infrastructure, is the over the top platform. We do believe that operator service provider in the telco should become platform companies, not only infrastructure companies, which entails specific features, which needs to become important KPI for explore a little bit these two layers, we start with, let's say, most complicated one for companies, which is what do you mean for over the top platform. As you if you think about the over the top offers, they are they have key features that are similar to all the over the top.
They have a few standard offers. They have just inbound channel. They have unique web interface regardless the market, the segment that they are covering. They have very stringent KPI. And clearly, they are digital.
They are digital native, and so the only language that they talk is digital. And that's basically, I think, the main challenge, but also the main opportunity. And in Fastweb, we believe that this is going to be the opportunity to build, as I was saying, a strategic advantage. Because if we speak, for instance, for onboarding and activation, I think clearly we will be never ever in a situation where we can match the onboarding, let's say, process in terms of timing of Netflix, which takes minutes or Amazon, which take minutes. But definitely, as a telco provider, we should be targeting one day activation, for instance.
And clearly, this target can be perceived as very, very ambitious. But for instance, technologies, greenfield like FWA, you can get to this target. All in all, a big role also in becoming a platform company. It will be, again, extremely important all the network capitalization, for instance, but also the attitude to enter more and more into the services. So the company and Fastweb has this ambition will be much more code oriented in order to have an hands on approach on the main features of the services, namely software and firmware of our CPEs, for instance, just to give you an example.
If you take all these ingredients together, clearly, you can easily reach NPS maximization, cost optimization of the network, clearly shorter time to market. And if you put all these three things together, clearly, lean and efficient organization. This is something and is a trend that I believe it will be a common, I would say, pattern for the company that will be successful in the future. It requires a huge transformation, but I think that Fastweb has shown that we are very good in surfing even highest waves. Coming to, let's say, more classical vision, we do intend to continue to invest in our ultra broadband infrastructure.
The first bubble shows basically situation 2020, so the coverage of 30% of Italian population with our fiber technology. But in the future, we will add 2 important streams. The one very close, the FWA, with which we will cover an additional 30% of Italian population. We do think that FWA is a perfect technology, very solid with fiber like performances and is the perfect technology to address 2nd, 3rd tier cities where it's very, again, difficult to deploy fiber classical technology, fiber to the home, whereby with FWA, it will be very, very, let's say, cost effective and also time effective. And then when clearly on a parallel scale, but it will take more time, in 6 years from now, we will be able also to reach the 90% of the Italian population, thanks with our 5 gs mobile network.
In order to gain time, in order to accelerate on the rollout of such important project, we adopted the strategy to partner with the best in class for each respective technology. And so vis a vis, let's say, Fiber to the Home, as you know, we have done the partnership with TIM. For what concerns the 5 gs mobile, we selected Win 3. Already today, Win 3 in terms of voice and throughput is the best network in Italy with a consistent, let's say, differentiation if compared with the other MNOs. And this is extremely important for us because, as you know, Fastweb has been always focusing on high quality rather than price.
And today with wind, we have, as I said, the best partner and the best MNO in terms of quality. 3rd one is Linkem. That has a very good frequency package for FWA, we will see in a second, but we can use already their FWA network and then co invest in order to expand it to reach the 30% of Italian population coverage that I mentioned before. That was the part of the strategy, which again, we really think is something that will build a strong competitive advantage. We don't see all our competitors to be on this page and probably they will not be in this page for a lot of years.
So we have a lot of time to develop and build a strong position. That was the future, but let's have a look also at the past. If you take net revenues, I think that Q4 has been a very, very strong quarter. But also, if I look the all year results, nobody in I think in Italy, but also in Europe can show such growth. The good thing we will see in a second in all the recurring market, we have been growing.
So also wholesale that today that in this chart shows a decrease in reality in the core services is increasing extremely well. The Q4, as I said, has been extremely strong, particularly in consumer. Thanks to the new offer during 2019, we have increased our offer, moving from €6.99 to €9.99 And this, with all the customer base that is growing, is finally showing up. And therefore, we do expect also this growth in 2020 onwards. Also, if I look at the service revenue dynamics, as you can see, clearly mobile is growing extremely well, but also the wireline and the value added services are posting consistently growth over the years.
If I look at EBITDA also there, plus 5%. I believe that also this is a extremely good sign of a company that is in a good shape, not only in terms of revenues growth, but also in controlling the cost. And as a result, since our CapEx envelope is quite stable, also our operating free cash flow is increasing significantly all over the years, especially in 2019. If we look if we move from financial results to operational results And we start with the B2C performance. I think also this year has been actually 2019 has been extremely successful.
Overall, if I look broadband, we have been we grown 4%. But for what we said until now, we don't look actually at broadband, we look at ultra broadband growth. And also there has been extremely, extremely robust. It's pretty much clear that ultra broadband is the focus. In Q4, the percentage of ultra broadband on the gross adds of the quarter was almost 90%.
So it's not a trend, it's a certainty. For what concerns mobile, also there, I think very, very strong growth despite increasing prices. But also there, there is a very good reason, because if you look at the mobile market, these are just 9 months because we don't yet have the, let's say, data of all the others and so of the market. But you can see that even if today we are still, at the end of the day, a full MVNO, but still an MVNO, we are growing extremely well even if we don't have the remedy package that Iliad is exploiting since 2 years. And also the very good news is that these results are based at the end of the day on the quality of the services and the consequent satisfaction of our customer.
If you look at Net Promoter Score, our Net Promoter Score is constantly increasing. It's the only one positive in Italy in the wireline. And since we are constantly increasing, we are really moving away from the typical telco service provider and even energy provider and really moving towards champions in the satisfaction of customers are like big retailers, big international retailers. And this is extremely important also in terms of churn dynamics. The other interesting stuff is that while in fixed you can clearly assume that this is as a logic since we invested a lot in the network, in the mobile, it could be for you surprising that we are the 2nd best in Italy with such an high Net Promoter Score.
But the reason for that is not only related to the quality of the network, but also for our service sorry, positioning on the market. We have been at least 18 months before Iliad, we have been positioning our mobile services as, I would say, the champion for the customers. So very, very, very transparent, very, I would say, aggressive in terms of prices and also Giga allowances. So as a consequence, our churn rate and overall the satisfaction of customers is extremely, extremely high. And that explains the results also in terms of net adds.
Iliad that still has a little bit premium on us on the net promoter score basically this promoter score is, I would say, for the 90 percent based on the very, very low price of the French. Whilst for us, it's also, I would say, quality of the network. If we move to the B2B performances, also here is a recurring story. Very clear that we are getting market share since basically the last 15 years. We got another 2% market share.
The revenue has grown at 11%. And our, let's say, growth comes from both PA, but also public administration, but also value added services. This is also something that will continue definitely in the future because here if I look at the Net Promoter Score, we are at a level of almost 60%. So it means that the customers are crazy, positively crazy for our services. And in fact, here, I would say that our churn is basically equal to 0.
Also on wholesale, we have done a very good year, as I said, if you focus on core services. And core services are driven especially also Q4 by the fact that we started to connect all the BTS backhauling of Wintre and Iliad. We are accelerating on this and also on our ultra broadband, let's say, wholesale in terms of access, where we are exploiting all the Tiscali customers activation. As you can see, also in terms of lines, we are basically double our, let's say, performances in the years. And this is extremely important because for us newcomers on the fixed market are not an issue, are rather an opportunity because also as you will see also in the future with Sky, eventually with Elliott, at the end of the day, yes, it's true.
Maybe we can suffer from the retail point of view. There is an increase in competition, but we can anyhow do business and increase our margins from our wholesale. So I think for us in a balanced view, actually wholesale is an opportunity and newcomers are an opportunity. So all these to, I would say, tell you the story on 2019, very, very successful. But 2019 is over, and so let's focus on 2020.
On 2020, basically, clearly for us 5 gs is the target. And there we have this very, very strong agreement with Win 3. We will start both rollout of 5 gs. Actually, we have already started. And in terms of customer base migration, we will start around March to move customers on the Win Threat network, which, as I said, it will be extremely positive experience because the new customers and old customers will be landing on a very good high quality network, actually the best in Italy.
In terms of 5 gs SWA, also this one, we are in execution as the 5 gs mobile. And we are just already starting the rollout by upgrading the current VTS of Lincoln and identifying the new rollout in order to achieve the 30% coverage of Italian population. On the corporate space, we want to leverage on the huge, let's say, market share that we achieved on, let's say, traditional services, connectivity and also some value added services by expanding our offer. What we want to do is to monitor and scout the market in the cloud and in the security space, which becomes every day important much more important for our customers. And here the idea is maybe not only accelerating the growth of revenues, but also increasing the margins attached to such revenues.
And I think that this is something an opportunity that can really be exploited very quickly. In terms of wholesale, also there 2020 is going to be a year of opportunity, because we will start to onboard and to activate also windrail customers, Sky customers. And also the FWA technology in second half twenty twenty will be an additional opportunity to do wholesale businesses with existing clients. If we do a deep dive on the agreement on the network agreement on the 5 gs mobile. As I said, the customer base migration on 4 gs network will start in Q1 for the 5 gs deployment.
In this year, we have relatively easy target, 500 macro sites over the next 12 months. This is extremely important for the future. That's why we did it By moving from a full MVNO, let's say, status to infrastructure operator, we will have significantly better cost structure with costs that will decrease not next quarter, but at regime level by 70%. And this is because we will offload a lot of traffic into our 5 gs network. If we move to 5 gs FWA, that for us, as I said, is the first target because it will be on we want to launch services by mid-twenty 20.
For us, it's extremely important, the agreement with Linkem, which is already operational in a vast majority of Italy. We have, as I said, now to build basically to network. We will use 2 different set of frequencies, the 3.5 gigahertz owned by Linkem, and they will develop and upgrade their network in this respect. And also the millimeter wave, the 26 gigahertz set of frequencies that we bought in the last bid. And so we will develop on the same sites the network at 26 and it will be managed by us.
This is clearly an infrastructure game. So it's a multi year agreement. Thanks by the combination of 26 and 3.5 gigahertz, we will be able to deliver fiber like performances, as I said, in 2nd and tier cities that today can exploit very, very, very poor performances. So that's why we think it will be a strong there will be a strong acceleration in our growth also thanks to this technology. Also there, by getting with this technology that is much more effective, much more quick in deploying, we will need 50% of the investment that we could have planned with fiber to the home directly.
If I look at the growth in B2B, clearly the ICT value added services remain and will be even more in the future a growth engine. Already today, our order 50% comes not from traditional services like connectivity voices, but directly to value added services or security, cloud, data center, managed services. But we do see also that this trend will increase. And so in the future, probably this percentage will grow up to 5%. As I said, we were really looking to expanding our offer because we do believe that with the credibility that we achieved today with the enterprise market, we can have, let's say, a broader hands on approach also on Adiall Centre market to the telco.
In terms of wholesale, we will try to push activations of our customers as much as possible. As I said, Tiscali is already an active customer since the last 8 months. Win 3 and Sky will start very soon. And so even if basically, we will want to exploit the same path of growth in Connected Lines because in 2019, we double the performance of 2018. And in 2020, we want to more than double the performance of 2019.
So there, we definitely allocate a lot of effort, but I think this market is a very strong opportunity. Top of that, when we will have the 5 gs network available, we believe that there will be an extraordinary opportunity in terms of wholesaling it to existing clients. So just to conclude my story positively. Revenues for 2020 will be at least 3% and EBITDA in a, let's say, window between 4% 6%. And the reason also there that EBITDA can grow more than revenues is also because for all with all the projects that we said, we will improve our margins and our cost structure by investing and becoming more infrastructure.
Clearly, the OpEx will be lower and therefore EBITDA higher. CapEx nevertheless will remain stable. What is going to happen also in the future, we will maintain the same level of CapEx, but the reallocation within the same envelope will change, so less fiber to the home, more 5 gs and FWA. Also, we do confirm the long term targets. So in mobile consumer, we do see this 4% or 5% every, I would say, month, every quarter, we see it much better, much cleaner, and we are very wholesale, our ambition to be a player of at least a 10% market share is very, very tangible, because as you saw the performances of 2019 shows this opportunity.
And also on this we are confident. To close with corporate, where today we have 33% market share, including everything. And there are if you look, we have been statistically consistently growing 2% each year. So I think those targets are very, very let's say, we are very, very confident with this target. Thank you.
Thank you, Alberto. I suggest we stop the presentation, the first part of the conference here and have a coffee break of around 15 minutes. Outside this room, there's coffee and some cakes to enjoy. Let's restart at 10 past 3 sharp. Thank you.
My reputation is too high for let somebody drag me with me.
Okay. Welcome back. So before coming to the financials and outlook, a few remarks to our cost programs, operational excellence. As you know, OpEx savings and the CapEx efficiency are 2 important pillars to protect our cash flow, which is under pressure due to the negative growth of the Swiss service revenue. Maybe looking back, what did we deliver in the last 4 years?
And these numbers are net savings. You can do the calculation. In the last 2 years, we delivered €250,000,000 net savings on indirect costs. I think the organization was very disciplined and did a great job on this side. The CHF 127,000,000 saving in 2019 comes €94,000,000 from workforce cost reduction, €69,000,000 from personnel and €25,000,000 from reducing external workforce.
And the right hand side, you see the areas of savings in 2019. I think it's impressive the improvement of the number of customer field cases, minus 26%. That's thanks to stable networks, stable platforms, low call rates after installation of the router of the set top box, it's really impressive. That shows if we can optimize the end to end chain, we really can reduce the cost level. Of course, it will not stop in 2020.
We think that we will be able to reduce indirect costs in Switzerland for the next 3 years of at least €100,000,000 each year on a net basis. And a few areas where we think that we have room to attack in the B2C, it certainly push the online channel. That does not mean that we will close stores, but we must transfer easy cases to online and follow a multichannel approach. Streamlining the portfolio. That means lower number of interventions, lower number of calls.
And then the field service integration, we did this integration in our construction units. There, I think we will see some relevant savings in 2021 2022. In B2B, again, here streamlining the portfolio. It takes a bit longer in the B2B area than in the B2C area. 1st, you have put the product end of sales.
In a few years, you can take it out of your portfolio because the customer still use those products. And then the benefit of the 1 B2B organization, which Urs mentioned, we don't only expect more revenues from that side, but also savings. And I think they will kick in, in 2021. And on the network side, I think we will do our homework on the supplier side, working on the optimization of the IT costs where we were quite successful in the last 2 years. And then automation of network monitoring, there you can do with RPA, Robotic Process Automation, cases in the network.
And then, of course, throughout the organization, we will first work on the overhead. Coming to financials 'nineteen and the outlook 2020. On the financial, I'll just give some additional remarks because Urs and Alberto, I think, have explained the most important elements of 2019. So if we compare 2019 with 'eighteen, we have to do some adjustments. On EBITDA level, it's certainly this lease adjustment of €226,000,000 coming from IFRS 16.
And at 2019, we need to correct for the impact of the exchange rate, €90,000,000 on the top line €29,000,000 on EBITDA. And then we have these restructuring costs, which we booked in Q4 this year. So overall, we have a flat EBITDA. I think that's a strong result, and we fully met the guidance 2019. On the revenue side, yes, overall, we saw the same dynamics in Q4 as we discussed together in the 1st 3 quarters.
Overall, retail customers, the revenues decreased by 2.8%. The details I will explain later and also Urs gave you already some elements. Enterprise customer, we saw a decrease of 4%. The negative thing is service revenue decreased by over €100,000,000 11% on wireless and 10% on wireline. Wireless is pure price impact.
And on wireline, it's fifty-fifty price pressure and the effects of the all IP migration. Positive element is certainly the wholesale business with a growth of total SEK 88,000,000. There we benefited from SEK 44,000,000 from higher broadband connectivity from our competitors in the retail area. Then we delivered fiber infrastructure to both operators. And on the MVNO, positive impact of close to €30,000,000 These were the clients which we moved from the UPC clients which were moved from the SALT network to our network.
This positive impact, we won't see anymore in 2020. I think the excellent performance of FastLab was explained in detail by Alberto. On the cost side, the overall OpEx of Swisscom Switzerland are €220,000,000 below prior year. And then the direct costs side, we have €194,000,000 lower acquisition and retention costs. That's related to the decoupling of the handsets in the new in 1 MobileGo portfolio.
Then we have higher costs for goods purchased. That's practically no margin impact, around €70,000,000 and then we have close to €20,000,000 higher costs for spot content in for our TV proposition. On the right hand side, the indirect cost reduction of €127,000,000 I think I explained that before. And then we tried to plot the whole dynamic of Swisscom Switzerland of 1 on one page. Overall, we lost €23,000,000 EBITDA compared to prior year.
On the left hand side, you see the elements which Urs explained to you already, the impact on the service revenue. Fixed voice line losses, prior year we had so in 2018, we had CHF 60,000,000 impact coming down as expected to CHF 41,000,000. On fixed mobile conversion, that's the discount on the bundles. We had the peak in 2018 with €85,000,000 negative impact, now coming down to €65,000,000 And then that's new, this change of revenue generating mix. That's the optimization of the customer in the customer base.
And then, as we saw before, new customers are coming at the low end of the portfolio into our customer base. That's this impact. €58,000,000 Then we saw we already saw this €112,000,000 service revenue, negative growth in the B2B area. That was a year ago was below CHF 100,000,000. Part of that negative impact is compensated by indirect costs.
And then you see in the middle, SAG SoC and device decoupling. That's the positive impact of the new in 1 mobile portfolio. That's €70,000,000 Then we have the impact from wholesale. It's included in the €102,000,000 Then we have some elements in hardware and the other direct costs. And we will discuss it later at the guidance, which elements will also show an impact in the future.
On group EBITDA, just some remarks on Q4 because we reported or discussed the 1st 3 quarters in detail. On retail, we had a quite strong EBITDA compared to prior year. We had over proportional cost savings and very low acquisition and retention costs. And in 2018, they were quite high. In B2B, also better performance in Q4.
We had less service revenue decrease than in prior quarters, combined with a small growth in the solution business. You remember in the 1st 2 quarters, we had some problems on the solution side. We always said towards the end of the year, we will improve this performance. On in the middle, wholesale IT and network, we had a bit less savings in Q4. That no surprise.
That was as planned. And then on Fastweb, we had this nice growth through all the 4 quarters in 2019. The elements below EBITDA. So the EBIT came down by €159,000,000 If we take out restructuring and currency effects, we have a comparable decline of €91,000,000 That has two main elements: depreciation in Switzerland, €44,000,000 higher. The main reason is the change in useful lifetime of the copper network that resulted in higher depreciation of €25,000,000 And then the second point is we have about €50,000,000 higher depreciation in Italy in Fastweb.
Interest costs, I think there we reached the bottom, only SEK 62,000,000 for a debt portfolio of over SEK 6,000,000,000. I think it's not possible to become much lower. And then we have this extraordinary impact on taxes, which we already mentioned in the Q3 earnings call. These tax expenses include a one off impact of €269,000,000 from the corporate tax reform in Switzerland. This positive one off effect is not cash positive in 2019.
That will be distributed over the next 10 years. So we had to book it just because of the IFRS rules. And the tax rate in the future will be at 19.5%. On CapEx, only one remark to Switzerland. So the CapEx excluding spectrum were below prior year, €55,000,000 We didn't stop any rollout.
That was primarily thanks to further CapEx efficiency. Not only OpEx efficiency, also CapEx efficiency is quite important. Fastweb, as Alberto mentioned, was stable. On free cash flow, I go directly to this slide. You see the free cash flow proxy, €1,600,000,000 Then we have this interest the low interest paid CHF 63,000,000 and taxes paid CHF 370,000,000 CHF 370,000,000 with some changes, positive changes in the net working capital that brings us to a free cash flow of €1,350,000,000 That means the dividend coverage is still well in place.
We distribute 85% of the free cash flow. Below free cash flow, we have one, let's say, material impact with M and A. These were not transaction with transactions we did in 2019. So the we have €240,000,000 were paid for the takeover of Search. The call option we executed end of 2019 for the remaining 50% of Search.
That's related to the public hook transaction. We paid that in Q1 2019. And then also is included the payment of the price for the Tiscali acquisition, which was also executed in 2018 and paid in 2019. And then there were some small acquisition in the IT area in Switzerland. Only a few remarks on the debt portfolio.
Still stable credit ratings. The credit rating review will take place. In March, you see the refinancing activities in 2019. Close to 80% of the portfolio is fixed. So no problems in the case of hiking interest rates.
And the average interest rate is 1%. And I would say it's well distributed. Also over the next few years, the next big refinancing will be the Eurobond of €500,000,000 in 2020. That brings me to the guidance. Revenue at around €11,100,000,000 EBITDA at around €4,300,000,000 and CapEx around €2,300,000,000 That means EBITDA minus CapEx €2,000,000,000 Considering €300,000,000 for the total lease expenses, we expect the free cash flow proxy of around €1,700,000,000 Then we expect payments for interest and taxes of around SEK 400,000,000.
That brings us to a free cash flow of SEK1.3 billion, around SEK1.3 billion, which is more or less in line what we produced in 2019. Maybe a few details on revenue. So the group top line will be down by €300,000,000 €100,000,000 is because of the stronger Swiss francs. And Swisscom is out fastweb at around €8,700,000,000 a decline of service revenue between €250,000,000 €300,000,000 would say 50% of this decline will come from B2C and the other 50% from B2B. Alberto explained the expected growth in Italy around north of 3% on revenue.
On EBITDA, group EBITDA, as I mentioned, around €4,300,000,000 Currency impact is €30,000,000 in that guidance. Swisscom is out fastweb at SEK3.5 billion. The negative impact from the top line will be partly compensated with cost savings, the SEK 100,000,000 I mentioned. And then we will still have positive impact from the debundling. We expect around €80,000,000 positive impact from the debundling, €40,000,000 you will see in other revenue and €40,000,000,000 you will see on SAC and retention costs.
Fastweb, as mentioned, an organic growth of around 5%. CapEx, Swisscom without Fastweb, around SEK1.6 billion. This includes all rollouts. This includes 5 gs rollouts. This includes the new Fibril strategy we have.
And Fastweb stays at around €0,660,000,000 And as was mentioned, the dividend story remains in place. When we meet these targets, we will propose again a dividend of CHF 22 payable in 'twenty one. With that, I hand over to Urs for some final remarks before coming to the Q and A.
Thank you, Mario. So the question is for what do we stand? And you see on the right side, that's nothing new. We are the incumbent number 1 in Switzerland. And Fastweb is the attack.
That's also maybe Alberto why you were faster during your presentation than the incumbent in Switzerland. So you see the different positioning of us. But for what do we stand? Our positioning is we are believing in integration. We are believing in converged offers, mobile fix, but also IT, ICT operation.
And we have a clear positioning in this market. 2nd belief and what actually guides our behavior is we have a long term perspective. So that's why also we think that we have to invest in our fiber networks. On the long term, this will pay out. Differentiation is a key element in our strategy.
So to actually bring a value add to our competitors. And then the last point is maximizing our free cash flow. We know that is important and that is also important for the 3rd point here. We want to be a reliable dividend payer with a predictable view on it. So for this, we stand and for this, we are working.
So now we will come to the Q and A, yes?
Thank you, Urs. And Mario, now it's time for the Q and A session. For that, Dirk Gvid, Spitsky and Orslinger are also available for specific Swiss questions. But before we start with the Swiss questions, let's focus on the Italian business, not because they are faster, simply because they have a plane to take. So let's do the first 20 minutes or so all questions around Fastweb.
Alberto can take over those. And thereafter, let's open the Q and A session to all other questions. May I kindly ask you to use the microphones because there are some people on the webcast, so they can also follow our conversation, 1st. And second, please mention the name of the bank you're representing and also your personal name so everyone knows from where the question is coming from. Who can I give the first question?
Fred, in 2nd row?
Hi, good afternoon. It's Fred Beaumont at Bank of America. So question on Italy. First of all, so wholesale, very strong performance. Core was €87,000,000 of revenue.
If you could just explain a little bit, you talked about some of the drivers, but looking into the next year or few years, what are the drivers there? You mentioned some of the backhauling activity you're doing, but if you could explain a little bit on that segment? And second part on my question, Italy is mobile is strong gross avenue. What's the margin profile of that business versus your core B2C business? Thank you.
Okay. So as I said, the two main lines of revenues related to the wholesale are on the core are the BTS backhauling and the lines access lines. Basically on BTS, 2019 has been extremely strong because of the Iliad expansion of the network and also because we started to execute also the agreement we had with Win 3 that entails also a big number of BTS to be fiber backhauled. And we started to roll out especially during Q4. So also in the future, if I see also the I would say the messages that Iliad is saying to the market, they will continue in 2020 to increase the number of equipped BTS.
And so we do think that we have a good chance to continue to connect and to backhaul the BTS with that fiber. Same thing applies with wind. In 2020, we will continue to roll out the BTS. The second stream is related to the access lines. As you saw in 2019, we doubled the performances of what we were doing in 2018.
In 2019, the only big customer related to the specific unbundling of the access was Tiscali. In the future, we will add Sky and also Wind. So also in this respect, we do think that the good performance of the Q4, we will continue also in the other quarters, clearly maybe not at the same rate, but it will be still a strong value engine. Then on the margin, basically, today on the margin we do a very, let's say, sustainable margin. And you can say approximately around 20%, which is clearly lower than our core business on the fixed, which is much higher, but this is clearly depends on the cost structure investment versus MVNO, let's say, status.
But even with MVNO status, we are we do think that this is very good margin. Thank you.
Thank you, Alberto. Next question on Italy. Michael?
Thanks. This is Michael from Goldman Sachs. And just picking up on the market share targets. I was just wondering perhaps why you're not a bit more aggressive in terms of the mobile market share target given the success in 2019 and where you are today?
Yeah. Let's put it in this way. We do think that this market share is achievable. We are confident to achieve such long term market share. It's also true, you're right, that we have a lot of good ingredients in order to sustain our growth because today we have already very strong services.
I think that after Q1, the quality will increase because as I said, the Win 3 performance are much higher than the other MNOs. We will deploy 5 gs. We will deploy also a very robust network. But for the moment, we'll stick to the guideline that we show. We can say that we are really confident to get to such market share.
Thank you. Next question, Georgios
here in a second.
It's Georgios from Citi. Firstly, a question around the spectrum debate. I think there are some ongoing cost case, I think, going on right now regarding the status of the spectrum on 3.5 gigahertz that you own. If you can update us on what the debate is and when do you think we get clarity on that? And then I just wanted to ask something around cloud.
We've seen a couple of operators, obviously Telecom Italia themselves, Vodafone, partnering with global players. I was wondering from a Fastweb's perspective, given that you are working with mobile operators around some of the above calling options and other things, whether it makes sense to find partners to share some of the investments needed for some of these, including on the cloud side? And then the final thing, which I was hoping someone else would ask, but didn't have been so far. You give us your view of what's going on in the big debate between Open Fiber and Telecom Italia? And where you see it with our 20 percent stake in FlashFiber?
Thanks.
Yeah. So on the basically debate on the litigation, more than a debate basically, let's say, before the sentence, the way operator that were saying that the our acquisition of frequencies was not correct, the Tiscave 1, that also the extension, sorry, was not correct. And third, that the price was too low, okay? And the judge said that definitely we are the rightly the owner of such frequencies that we rightly entitled to get the extension. So all these are, let's say, clear.
The third thing said that we paid are correct. I said again because Agicom has already performed this analysis. So that's why Ajicom and the Minister of Development are opposing themselves to such sentence because there is no need for Agikom to redo the same analysis that has brought Agikom to say that the price that we pay was okay. So that's what it is. I think that as usual in Italy, there are a lot of operators that want to do competition by litigation.
But on these they all fail that's for sure. On the cloud, on the M and A, I think that in the last, let's say, month, we have seen big names partnering. I think that in our mind, we are really thinking much more in very good leader niche operator. So we want really to have hands on approach and so to increase our internal skills. I think that will never happen if partner with a huge, let's say, global player.
You just do kind of distribution, let's say, partner. For us, it's a completely different spin. We really want to have to increase our capability in the core platforms. So that's why we are looking at small niche players. The third one, I mean, I'm not passionate about, let's say, Romans, but I would say that I honestly, I cannot judge in a sense that everybody can every company should pursue whatever believe is strategic.
I just say that whatever will happen, we really need to make sure that competition is enforced, that there are no particular gift to anybody because as fast as we invest in a huge amount of money in infrastructure, we want also to protect our investment and be able to grow as we were doing and as we will do in the future.
Thanks. Thank you. Perhaps Simon first.
Simon from Barclays. Just on the Linkem agreement, just trying to understand, so you say 2 5 gs FWA Networks. How does that actually work? And what's the topology of how you build that network? I know in the past you've thought about maybe using your street cabinet infrastructure to help with such a network and other synergies with the Windtra agreement as well.
So can you use sites that you use for the Windtra agreement, for the Lincoln agreement? And just some more color around that. Thank you.
Yeah. No, we will use different, let's say, BTS. Basically what we're going to do is to use 2 different set of frequencies. The millimeter wave owned by us 26 gigahertz and the 3.5 on by Lincoln. So basically what we will do on the same side, so synergy, we will develop we will put our antenna millimeter wave.
They will put they will upgrade their antenna. And so we will able, from a topology point of view, in such area to, let's say, combine services with the 2 frequencies. So which means that we will have the coverage with 3.5 and the intensity with the millimeter wave. But the 2 networks at the end will be separate. Can then combine the services, but the 2 will be separate.
1 operate the 26 gigahertz by us and the 3.5 gigahertz by link. Thank you.
Thank you. Next question perhaps, Luigi, if that's still the case?
Yes. It's Luigi from HSBC. First question on the network sharing agreement between TI and Vodafone, which has part. And I was wondering what's your view about it and whether you would expect remedies that can help the other players in the market? And then second question in terms of well, thinking about competing via litigation.
I think Ilia is appealing your agreement with Win Tre. What's the rationale of their appeal? And does it have any lag? Thanks.
Clearly, the deal between Vodafone and TIM is a deal that everybody should look at because 2 the 2 main players are put in and joined forces. And therefore, I think European Commission is looking into this deal that has been just notified actually after almost 12 months from the announcement. But I do think that European Commission will look into it. We do expect that some remedies should be available, like sites available, for instance, that is that as you know is a very scarce resource. But I think we'll leave to the European Commission the work.
But we do believe that since the magnitude of the 2 players, it will be really likely that some of these will happen. And clearly, we will look into that. In terms of the litigation that Iliad started against the deal, our deal between us and Wintra, I think again it's more it's based on nothing. I would say that we are very confident that also this appeal will follow the same fortune as the one related with the extension of frequencies. Thank you.
And perhaps next question. I don't know whether Jacob is still on or is it done? Matthijs?
Yes. It's on fixed wireless access. When will you launch? And could you provide some color on price points? And contrary to Swisscom, you sounded pretty confident that you will grab significant market share with fixed wireless access.
Could you give some color on
that? Yes. We are, let's say, targeting mid-twenty 20, so let's say, close to the summer. We do believe that FWA is, let's say, robust technology. It's not just because, I mean, we tested many times in the last 12 months on field with, let's say, with directly with customers.
You have all the experience of Verizon, for instance, in the U. S. The reason why you still don't see a lot of operator in Europe investing in this technology is just because the millimeter wave frequencies have not yet been allocated. So this is the only reason why FWA is not booming, because for once the millimeter wave will be available, I can tell you that everybody, every operator will look at that. Clearly, the in Italy, I'm talking the MNOs are now giving priorities to 5 gs investment because they have all their cash flows there.
So if they don't invest in 5 gs, they risk to lose all the mobile cash flow. So the FWA is deprioritized, but just because of that, you can assume that in 3 years all MNO will invest in FWA, because it's a very strong technology that can deliver fiber performances in area where today customers they surf at 10 megabit. So it's a very strong competitive advantage. That's why we want to accelerate as much as possible because we will have a time advantage of, let's say, 18 months, 24 months, and we will build a huge commercial success. There is a huge commercial opportunity there.
And once you get a customer with fiber like performances, the possibility for this customer to churn is very, very low. Thank you, Alberto.
Perhaps Urs, you want to Maybe I
think you have to look at also in a
bit another view if you are the incumbent or the attacker. It's a total different game, the opportunities of fixed wireless access. And if you have a broad fiber network already installed, that's a bit another case than if you are on wholesaling. I think you can't compare 1 to 1 Italy and Switzerland.
Okay. Thank you, Urs. And I also think it is a good moment to open the Q and A session for all the questions as well. So not only any more Italian, but also Swiss. But for that, I would like to Roman, probably you have one very last question on Italy and then
Yes. Romano Abusa from JPMorgan. Just one very last one. On the future of Iliad in Italy, what do you see in terms of their current performance in the market? And do you have any views on the medium term role that Iliad will play in Italy?
If you look just at the commercial performances, so number of clients, I think they are doing great. I think that their challenge is more on the cost structure. So they do need to off load all this traffic that today are paying in a roaming contract to Windrail and they need to build their network as fast as possible. Now we are talking about a 4 gs network. So first goal to accomplish, build a nationwide 4 gs network.
2nd point is what is going to happen with 5 gs. And eventually, 3rd priority, SWA, what we will do because also they bought the frequencies, the millimeter wave. So I think that they have multiple targets. And I think that on each of them, they are quite in delay if compared with the investment plan of all the others also if compared with us. So as you said so, I think that overall from a strategic point of view, they are focusing on, I would say, first on 4 gs.
So they need to make the service right. They need to make the network. It's a big challenge because they need to run at much higher pace that they did in last year. It's an operational challenge. So if they are successful, then they need to start to think at 5 gs, but with a 2 years delay if compared with all the others.
Thank you. And first for Jacob.
Jacob Bluestone from Credit Suisse. So two questions on Switzerland, please. Firstly, on your fiber plans, you obviously set new targets today for basically doubling your fiber to the home coverage while keeping your CapEx flat. And I was just hoping you could maybe elaborate a little bit more on what are some of the things that you're doing less on? I mean, you presented in your slides that you would be reducing CapEx on IT and projects.
And that's kind of how you free up the capacity for spending more on FTTH. Maybe if you can just explain a little bit more what is it you're doing less of to be able to keep your CapEx flat while doubling the fiber coverage? And then just secondly, on the competitive environment, if you could maybe share your thinking there. I think you mentioned that you expect the pricing pressure in B2B to ease a little bit. So maybe if you can sort of tell us a little bit what's going on there.
I mean, you obviously highlighted that there's still pretty intense pressures on ARPUs. I think you said mobile ARPU down 13%. What is it that gives you the confidence that we will see this easing up in B2B? And then maybe just linked to that, can you maybe also just share your thoughts on the consumer competitive environment? Is your expectation it sort of stays as competitive as it is now with big promotions?
Or do you also foresee an easing of the sort of pricing and competitive dynamics on the consumer side? Thank you. Okay.
The first question on CapEx will be handled through
I can take it. You can do both. Is EFO don't want to talk about companies? No. I think let's start and then Mario can elaborate on it.
We have done project also projects which are phasing out like whole IP. So there were a lot of investments in IT. So there are some phasing topics on the project side. And then also on fiber, we will work on the CapEx efficiency, too, that we can do with the same money more. I think there are different effects.
We feel ourselves comfortable that we can do our business with the CapEx mix and project allocated CapEx.
And on IT and projects with 15%, they are still €200,000,000 And I think an organization can do enough with €200,000,000 per year. And maybe to add on FTTH, today it's FTTH, and the main part goes into fiber to the street. And that will come down after 2021, and that will transform to FTTH. And also there, we have this envelope and the organization has to find ways, as Urs mentioned, to reduce the cost per line. That means, as we did in FTTS, general contracting with suppliers, etcetera, maybe corporations, we need to find ways to manage the available money to get out to do this rollout.
And we have a learning curve. So we are confident that we can increase the CapEx efficiency on fiber to the home rollout.
Okay. And then on B2B and B2C, I think the experts are sitting next to us
for B2B. Starting with the wireless piece, yes, we believe that price pressure will remain, but we see some tendencies at least in Q4 on one side that there is some hope that it will relieve a little bit. On the other side, we also will terminate our migration towards the existing portfolio during Q2. So therefore, we also have additional upselling options out of a broader portfolio into the installed base. And there we believe there is a chance that, let's say, the pressure will be a little bit less.
But at the end of the day, it will depend on a lot of negotiations going on during the year. But there is some hope to that there is a small relief. On the wireline side, as it was mentioned by Urs, the All IP migration is completed also in the B2B space. We have some last lines in migration now in Q1. But therefore, let's say, the washing machine effect from all IP will for sure, let's say, not be present anymore in 2020.
On the other side, as also exposed or expressed in the documentations, the migration toward SD WAN will also start as a larger challenge, not only for 2020, but there we see also a set of opportunities, let's say, driven by this technology transformation to do upsell and also drive more converged offerings in the B2B space. But overall, for sure, pressure will remain in the service revenue in the B2B space in 2020. And we do our utmost that it will be as small as possible, let's say, to dip towards into the future.
Thank you. Then on B2C, Dirk?
Well, on B2C, I think our own story is 1 very much around our brand and what consumers associate with that. That is not to have the cheapest price, but it is to have the greatest network, the greatest product and the greatest service. And that's obviously the story that we have written and we continue to write also in 2020 with new innovations and reasons to stay and reasons to come for Swisscom that are beyond price, obviously. We invest a hell of activity in quality of products, network services and loyalty programs because efficiency in a saturated market is key to manage your customer base and have them and keep them happy. And as far as the commercial activity is concerned, we are not the 1st mover on promotional activities.
We don't see anything we don't see any marketing smartness in it. Everybody can just lower the price. We had looked at the recent management changes that have happened in the industry, whether they immediately yielded us a reduced intensity of promotional activities. We don't see that yet. Maybe it's still coming through.
And as people also need to look after their P and Ls because you see the effects of that in the balance sheets of other companies and who equally need to invest and provide a return. So, it might happen, but we are reducing, let's say, our proactive like ATL type of promotional activities. If you have promotions, then we use them rather selectively.
Thank you, Dirk. And Paolo, perhaps 3rd row.
Hi. It's Polo Tang from UBS. Just want to follow-up in terms of fiber. Can you maybe just clarify what the strategic rationale was for doubling your FTTH footprint? I mean, was it competitive pressure because UPC are now doing 1 gigabit speeds?
Was there political pressure? And then also just in terms of FTTH, could you clarify what the cost per home passed is and what the cost to connect is? Or it just gives a rough indication. Thanks.
So why do we accelerate the rollout fiber to the home? There are different reasons. One is certainly the long term technology in wireline will be fiber to the home. And if you have to ramp up your network, you have to define are you investing in a hybrid technology or are you going directly to fiber to the home? Our strategy was and that's we are still convinced that those are the right strategy, first going in the whole country, ramping up the speed on a level where we are competitive.
And now we are ramping up our fiber networks. That's the main idea behind it. We see on fiber to the home network also a slightly better Net Promoter Score. So that's the second point. And then it's also as you mentioned, it is also a competitive element in it.
In Switzerland, we have 85% coverage of cable operators. And we have to be competitive also on speed. But I think the major it's more a marketing game. Today, it's more a marketing game, speed. But in 5 years, it will be maybe another topic.
That's why we are ramping up the network. On the costs per household, we don't disclaim them. Mario?
No, we have disclosed that the cost per household for the first 30%. They were around CHF2,403 per line. But in the future, they must be low. As we mentioned, we will work on those costs. And we have now time to find ways to reduce these costs significantly.
Andreas
Andreas Milos, KB. Thanks for taking my question. Same question actually on the FTTH rollout. I mean, do you see certain areas where you do that? Is that more in the agglomeration part in the cities?
Or we I mean, you covered one of the answers by saying, okay, this 85% cable coverage is certainly the area you invested. But for the rest, is there any case to do also in rural areas more on the FTTH investments? And then the second question, I mean, you mentioned in your initial remarks on 5 gs monetization. I think in the past, it was said that a price tag could be like CHF 10 per month more. Do we have another price tag right now?
It seems that, that is sort of decreased.
Dirk will take the 5 gs question because it's monetizing and he's responsible for the turnover in the B2C business. I will take the fiber to the home question. So our rollout strategy, there are different elements how we do the rollout and how do we pick the different regions. One is certainly a business potential view. So where do we see businesses?
What are our market share in this region? So potential upside potential. 2nd question is also where is our competition with speed, the competition element. And the third is also more a bit a tactical one. If we see that there are other activities in rolling out fiber to the home network, this is a very regional topic, we are open to cooperate.
And so there are different elements how we do the oil plan. But certainly, first, the bigger cities and villages and not the smallest one.
Thank you. Now
Peter So on the monetization of 5 gs, when we introduced the in1mobilego tariff plans just almost a year ago, As you might have followed, we also did a rebalancing around the scaling elements of the different tariffs, which were determined in the past very much by speed. Now we only have 2 speed classes. 1 is like in the basic tariff is up to 100 megabits. If you want to have more, then it's an additional CHF 10. So as a bolt on that the customer can buy.
And what is an also, if we did a bolt on bundle, if you wish, that has the beyond 100 megabit speeds and gives you also 3 further devices like for tablets, a watch and so on and so forth for 20 Swiss francs. And that bolt on is actually working very well with high attachment rate already. So I think the signals are encouraging that we can monetize just beyond the poor connectivity and the basic speeds also with additional values like higher speeds and more devices.
Thank you. Next question, Roman, first one.
Thanks. It's Roman again. I wanted to follow-up on fiber. So on the 50% to 60% FTTH target, it's reasonably wide. And I just wanted to go back to the drivers of your thinking and how do you balance between CapEx budget of €2,300,000,000 and all the other different drivers that you've mentioned, competition, what's the business potential, co investment potential, etcetera, etcetera.
Do you start with keeping the CapEx flat and then essentially everything falls out from that? Or is there a risk that CapEx may be higher if you see the need to accelerate your fiber investments further? That's the first one. And then another one, I'm just curious from a rollout perspective. If you have a household where you decide to go directly from copper to FTTH and then if you have a household where you go first to FTTP, let's say, and then to FTTH, is there a cost difference?
Is it cheaper to go directly to FTTH or not? That's the second one. Then the third one, can you just elaborate a little bit on the co investment potential with utilities as you have done for the first 30% of coverage, please?
Good. Maybe to starting with the last question, cooperation. So it's more a tactical topic. If we see that we can partnering for reasonable conditions, we will do it. Sometimes the conditions are not reasonable and then we don't do it.
So it's a very, very tactical topic. And the second point is, is it to fiber to the home or doing a middle step fiber to the building? I think that this actually, if you do it in 2 step, fiber to the building, fiber to the home, at the end, it's more expensive because you have to touch it 2 times. But the difference is not too big on this cost element. And we our intention is to go directly to fiber to the home, but there will be cases who we go directly where we do the sidestep on fiber to the building.
So it's also more business oriented how we do it. But fiber to the home will be the main approach. And then on the CapEx, our ambition is to manage it with the CapEx in the region of SEK 1,600,000,000 as we explained it and to allocate and to work on CapEx efficiency. That's our challenge. And we think that we can be competitive on this level because you don't need today 10 giga.
It's a marketing story. And we will have speeds on our hybrid and fiber to the street networks of 300 to 500 megabits per second. So we are competitive. So we have not a burning platform to roll out all Switzerland now on fiber to the home. That's why we can take the time to do it.
And then
we think also in terms of capacity, this is a reasonable level. So planning capacity in Trisme and then the construction capacity in the market. So it doesn't make sense to push like hell a rollout and then to stop. So you can get also better prices when you can ask, let's say, for a steady construction level. So it's a combination.
Thank you. Next question, Georgios.
Thank you. Maybe two questions, please. The first one is around the debundling benefit for 2020. I think Mario, you mentioned it when you are going through Slide 69 that there would be around €80,000,000 benefit for 2020. And it was around €70,000,000 something, I think, on Page 62 for 2019.
Is it possible to give us an idea how that phases in the future years, whether it carries on or whether the benefit ends after that? And then my second question is really a follow-up from the question Jacob asked earlier around CapEx. What's interesting in that slide is you keep maintenance stable at 30%, And we have been told by others that new technologies need lower maintenance. So I was just curious to see why you didn't see maintenance as one of the routes to reduce?
So on the debundling question, Georgios, we will see the effect in 2020 the last time. So €80,000,000 €40,000,000 also revenues and €40,000,000 in acquisition retention costs in the direct costs. And then in 2021, the whole thing is through.
And then to the maintenance costs. As long as you have hybrid networks, as long as you have copper, the maintenance cost will stay. If you are once in a pure fiber to the home network, then maybe the costs are going a bit down. That's but that needs some time. That's one point.
The second point is maintenance costs are strongly driven by the dynamic in a country. If you have a lot of construction in a country, you have also higher maintenance costs because you have to rebuild your network. If they reconstruct the street, sometimes we have to put our tables in another way. And these are also other elements. And
And maybe to add, the 30% remain the same, but in Swiss francs become lower because CHF 15 to CHF 17, we had CapEx of CHF 1.7 to 1,800,000,000. And now we forecast 1,600,000,000. So in absolute numbers, the amount goes down. Just the percentage remains the same.
Okay. Next question, Luigi?
Yes. Hello. The first question is on the management of legacy networks. So just medium term, if you think about the copper switch off and maybe the switch off of the earlier mobile generations, how do you think of it in terms of phasing And whether it can bring to significant savings that can go on top of the current savings guidance? And second question is on the market structure.
Your thoughts whether I mean UPC Sunrise is over for now? Will it come back in a different shape? If you have any idea on that. And then lastly, on Huawei, if you can remind us the position of the Swiss government. We have seen in the last week BT and Vodafone adding to their CapEx bill because of Huawei, if you see any impact on you?
Good.
On the phase outs, what we do is we are phasing out 2 gs at the end of this year. And then 3 gs is not yet defined. But I would say in the next 4 to 5 years, we will also work on a phase out of 3 gs. And then you can decrease some costs, but that will be not in the same magnitude as in wireline when you are phasing out TDM networks. The main advantage of phasing out mobile technologies is that you get more space on the sites, the base stations, And then you need less antenna, so then you have capacity free for 4 gs or 5 gs.
And then phasing out copper technology, that's more, let's say, this will be a very regional approach. If you are once on a full fiber to the home network, that's certainly an opportunity to phase out copper. But you must have also all the customers such things, yes? Then on the possible consolidation in Switzerland, so I'm not the driver of it. And I think for Swisscom, it doesn't matter what kind of consolation we have.
For us, it is important to go our way on differentiation. And I don't know if this will come back. From an industrial side, it certainly makes sense to combine these 2 companies or maybe another consolidation. I can't tell you. And I don't have more insights than you have.
And then the last question on Huawei. So we don't see guidance in Switzerland up to now on it. And Switzerland is a neutral country. And I think for we don't know what politicals will decide because that's a the dimension or the dynamic can be quite fast because there are a lot of elements who are playing in. And the view today could be another view of the Parliament tomorrow.
So for Swisscom, it is important to have a multi vendor strategy. And on mobile, we are not at all on Huawei. So we are China let's say, China free on mobile. And in the wireline business, we have some components from Huawei. But that's today not actually on the discussion.
I think for us, we have to ramp up. We have to have a secure multi vendor situation. And in each case, when we have to reinvest in a new technology or in a new, let's say, step of technology, we have to take the decision with which supplier will do it.
Thank you, Urs. Simon?
Thanks. Simon from Barclays. Just on convergence. So you had good success of pushing in 1, and particularly fixed and mobile convergence. But the momentum seems to be quite stable now.
What's the thinking behind whether you accelerate that any further to protect your base because you've highlighted continually the churn benefit you get from in 1 mobile fixed convergence? And then just secondly, Mario, sorry to ask, but could you just go through those EBITDA 2020 drivers again just to check we got them down correctly? Thank you.
Okay. First question, Dirk?
We are still happy with the customer appreciation of convergence offer. We're actually deepening the ZIM household penetration because of the advantages that sit within the overall offering. We are looking here and there to widen the eligibility. For instance, right now, you have customers eligible only when they have certain mobile tariffs and certain other wireline tariffs. We are looking at that, but no conclusions at.
And whether that then would be necessarily a monetary benefit, we don't think so. But we can see that we provide other benefits to customers, such as offering content, service packages and so on and so forth. It doesn't necessarily need to be a monetary benefit in the future, but more like increased value, if you wish, when you have both the mobile and the fixed line offer with us.
Okay. On the
guidance, was it so confusing on the guidance?
Yes, maybe.
No, maybe once again on the top line. So top line will be down at around CHF 300,000,000. CHF100 1,000,000 come from the storm of Swiss francs. And when Swiss comes out fast, that we will have a decline on the top line of €250,000,000 to €300,000,000 50% from B2C and 50% from B2B. And then on Fastweb, an increase of revenue of around 3%, a bit more than 3%, Alberto guided.
Then on group EBITDA, around €4,300,000,000 and there the currency impact is negative by €30,000,000 And in Switzerland, also Swisscom is out fast track, so we have the negative impact from the top line, partly compensated with cost reductions of around SEK100 1,000,000. And then we have this effect we discussed with chargers, the SEK80 1,000,000 from the debundling. That's a positive impact. That brings you to the guidance of Swisscom Switzerland and Fastweb a growth of around 5%. Is it okay?
Thank you. Fred?
Hi. Thank you. Fred again, that's Bank of America. Question on the B2B side. So looking at your the pressure in legacy, which is still double digit revenue decline in service, We've seen solutions now stable.
And you have this chart, Page 35, showing the ICT market. Can you explain a little bit, first of all, on that service revenue component where we could see that evolving in the next few years? And secondly, on ICT, it's a €8,000,000,000 market or €10,000,000,000 €10,000,000,000 market overall depending on how you look at it. Where do you think you can play in that in the next couple of years as well? And overall, is it enough to get this segment back to growth?
Thank you.
Starting with situation on service revenue, as mentioned before, it will for sure highly depend on the market dynamics in the B2B space, especially in the enterprise part of the B2B space. So therefore, really hard to predict what it will be this year finally and also over the next years. What we definitely can say that from a market share perspective point of view, we have delivered a solid sales performance, but prices are still under pressure. We hope that, let's say, having seen the price point where it is that at the end of the day the dynamics will, let's say, slow down a little bit, but that's a hope that's at the end of the day to be confirmed over the next quarters. That's perhaps the element on the service side.
On IT business, 2 or 3 statements to mention concerning question 1. We see a very positive dynamics coming out of Q4 in our growth environments, data center, cloud and securities, which are also these pieces of the market where we have seen the double digit growth on the market size. So there, we believe we have good momentum looking forward. We have a strategic approach also around the OTT, so partnering with Microsoft, partnering with Amazon Web Services here in Switzerland, where we also see momentum. So therefore, we believe we have a very solid position in the enterprise market to be the service integrator for our large corporations, having our own offering for private clouds, combining this in hybrid approaches.
And the vast majorities of today's enterprise workloads still remain in terms with Swiss commerce on the on with Swiss customers on their premises. So there is a for sure potential to address. And there we really see a solid growth pathway forward, but we have to execute it. And for sure based on our market situation, Barq, based on our customer trust, there is a game to play for us to provide growth in the solution business.
Thank you. Urs, next question, Matti.
Yes. Matthijs again, Kepler Cheuvreux. A quick one on UPC sites. Have you seen more activity from this company since the merger or did a possible merger with Sunrise sale? And could you also give some more color on the entire competitive environment, not only in B2B, but also obviously in B2C?
With whom are you competing? Is mainly active, etcetera? Thank you.
Thank you.
Good. I take UPC and then Dirk you can take the color. So on UPC, we don't see actually much more activity since the canceled merger. What they do is actually but they have already done it before, is promoting more ultra high speed networks because they made the ramp up to higher speeds. So they do more marketing campaigns on speed.
But on the, let's say, whole market dynamic and if I also look to our figures, I don't see really a big change in this competitive dynamic between cable operators and Swisscom. Color?
Color. Let's say, if you look at, let's say, wireless in general, mostly what is going on where the postpaid growth is coming from, that's pre to post conversion. So that's a big topic, obviously. We got a big prepaid pool in which everybody is trying to fish in. And so therefore, that's a focus area there for us to do the pre to post conversion, yes?
Then as said earlier on, the promotional activity is rather intense. You think the anchor price point right now for like a full fledged in Switzerland would be in the normal price like CHF 60, while the street price would be almost always like CHF30 or so, yes? Most prominently driven by salt and Sunrise. And Sunrise, that's mostly in the form of yellow. When we do churn analysis, we see that roughly 70% to 80% of customers that churn would say that they are profiting from a promotion to where they are going.
And then it's Sunrise, most of them go then actually go to the yellow brand. So that's what like is happening. And then you have the what's happening in the marketplace is the asymmetries of the marketplace. So there's customers who looks like UPC, who still are growing in mobile, where they're exploiting that the cost sell into their own wireline base. And then that gives them a constant flow as they are working on their base.
And some of them obviously come from us, if you wish. So that's kind of like what's happening in the competitive space there. On the wireline side, we see that local cable operations have a tough time. And then you know, Salt are doing the quarterly steadily thing, if you wish, that you can look up that is happening. And again, I think the most well, how should I say, from a competitive pressure standpoint, it would be like Sunrise again with the promotional activity that they are displaying.
I mean, just now it came through the ticker CHF 40 for gigabit for a year or it's Internet portals like KOKA that gives you these big discount offers forever or for 3 years, 5 years or whatever. Needless to say, we find that rather unnecessary and we said there's no marketing genius to it. Everybody, junior product manager can do and compete on pricing. But that is what is happening. We are not marching the parade.
We use promotions rather tactically and where appropriate, but we want to actually refrain from ATL promotions. There's enough money in this market for everybody, and we don't find it the right strategy to devalue the service, which actually becomes ever more important for consumers via overly promotional activity.
Okay. Thank you. All clear? Okay. Thank you.
Timing wise, as we are coming to, let's say, 1 hour Q and A session, I think we take or suggest we take one last question. I also have to name Robert. And then also, I think we close down the Q and A session.
Yeah. Thanks. It's Robert from Deutsche Bank. It's on your cost savings actually the €100,000,000 next year, which I think is in line with what you just did this year. How much of it is down to the innovative partial retirement program, which seems quite attractive.
When do the banks start to do that? But also you've done a restructuring charge I'm new to Swisscom, but you've done a restructuring charge in Q4. What's your guidance for restructuring charges in future years? Thanks.
Maybe I'll take the question on this retirement or part retirement, Mario, then on the restructuring costs. This part time retirement, that's not actually there are 2 dimensions in it. 1 is to be a more attractive operator or company for employees in which are becoming older. I think that's a demand of the market. And then some we have also specialists in it.
So this gives us the opportunity to keep the specialists for a longer time. Otherwise, they go in early retirement. That's one element. And the second element is we can use it also if we have to cut jobs. But the main element is to be a more attractive employer.
That's the and we don't think that now there will be a huge, huge wave of employees who are going to this program. And it's a pilot. That's also important to say. We do it now for 1 year. And then we look what will be the impact and then what is our actually what are the benefits for both sides.
And on the restructuring charges, so the last one we had 3 years ago, it was SEK 80,000,000. Now this year, we have SEK 56,000,000. Now it's difficult to say going forward. First of all, we will enter into a phase where we have a lot of retirements because of the baby boomers. And important in cost management is and I think Swisscom did that in a perfect way in the last few years that you have a mid- and long term view that you can plan with the turnover of the personnel, with the retirements.
And then at the end, you have maybe some FTEs where you have to apply the social plan. So it's difficult to say whether we have which amount we will see in 2, 3 years. It really depends on these midterm plans we develop with the line managers.
Okay. Thank you, Mario. At this point, it is from our side I would like to invite you to have some drinks and snacks outside together with us. Most of the people will be around, so you can do some informal chatting as always. Thanks again for your attention.
Thank you for the presentations. Looking forward to seeing or hearing you soon, if not hearing, certainly on the phone. Have a nice evening. Bye bye.